I just read the white paper and was wondering why there are so many issues with scalability.

Surely if the miners can choose how many Transactions to put into their block, there could be some kind of rule that says you must put at least 10,000 transactions in each block. Then there could be way more Transactions per second.

The one thing you know is that full blocks are bringing much profit for miners than not filled blocks. On the other hand, the Bitcoin developer team want to remain the block size and not bigger blocks while a part of bitcoin community wants bigger blocks. In the next fork, the altcoin B2X brings bigger blocks and the SegWit functionality remains.

The one thing you know is that full blocks are bringing much profit for miners than not filled blocks. On the other hand, the Bitcoin developer team want to remain the block size and not bigger blocks while a part of bitcoin community wants bigger blocks. In the next fork, the altcoin B2X brings bigger blocks and the SegWit functionality remains.

What is the advantage of having smaller blocks? All of the data gets converted to a merkle root at a later date anyway so there shouldn't really be a size problem should there? Besides, I thought that the block size is undetermined anyway - It's up to the miners to choose how many transactions they want to put in each block.

Is there something in the current protocol that is stopping miners from including, let's say, 100,000 transactions in each block?

Smaller blocks can propagate with less latency and bandwidth and also require less resources to validate. Smaller blocks allow for more people to run full nodes as the network bandwidth requirements are lower. Larger blocks will likely lead to fewer full nodes and an increased orphan rate.

All of the data gets converted to a merkle root at a later date anyway so there shouldn't really be a size problem should there?

No, that does not happen. The section about that in the whitepaper only refers to on disk storage for which we have a much more efficient method: pruning. The network and computational requirements still exist as full blocks still need to be uploaded and downloaded and then verified.

I think the way the scalability problem is "left" unresolved does support conspiracy theory of how AXA , etc. has bought over bitcoin. There are many questionables in the current protocol:1) allowing poweful hardware to having mining advantage is simply against distributed consensus.There is no need to have transfer fees, incentives, etc, to motivate these mining conglomerates. If the nextday, their rigs are all destroyed - it is better for bitcoin; there are million of desktops in India, Indonesia, China who would willingly do the mining provided the protocol is design to have one-node-one-vote. As of now, you cannot stop others to think the "open source" developers have not been bought.

Myth: bitcoin does not have the drawback of fiat money - the total BTC number is 21 million.The developers could change the codes tomorrow to allow 1000 million BTC in 2140! They could then sweet talk about how it would benefit bitcoin, etc. It is still all politics. This myth is very good to bring in those whohave been told the evil of fiat money. But now, we have these "open source" central bankers decidingon the money supply.

1) allowing poweful hardware to having mining advantage is simply against distributed consensus.

Even if BTC's algorithm was ASIC-resistant, the vast majority of miners would be people who could afford huge investments in mining equipment, particularly in expensive GPUs in areas with low electricity.

Myth: bitcoin does not have the drawback of fiat money - the total BTC number is 21 million.The developers could change the codes tomorrow to allow 1000 million BTC in 2140

I assume that by "developers" you mean "Bitcoin Core developers", because it's important to note that a significant number of people run clients other than the reference client.

However, this is entirely false. If the Bitcoin Core client was altered in this way, people would have to choose to upgrade their client. If people still run clients which involve having a max of 21 million coins and they continue the chain with a max of 21 million coins, there will still be a max of 21 million coins.

But now, we have these "open source" central bankers decidingon the money supply.

False. Central bankers decide on the money supply, whereas what Bitcoin Core developers do (not that they have any intention of doing this), is ask people to support an increased money supply. People could still choose to support the previous money supply and it would still exist.

Myth: bitcoin does not have the drawback of fiat money - the total BTC number is 21 million.The developers could change the codes tomorrow to allow 1000 million BTC in 2140

I assume that by "developers" you mean "Bitcoin Core developers", because it's important to note that a significant number of people run clients other than the reference client.

However, this is entirely false. If the Bitcoin Core client was altered in this way, people would have to choose to upgrade their client. If people still run clients which involve having a max of 21 million coins and they continue the chain with a max of 21 million coins, there will still be a max of 21 million coins.

But now, we have these "open source" central bankers decidingon the money supply.

False. Central bankers decide on the money supply, whereas what Bitcoin Core developers do (not that they have any intention of doing this), is ask people to support an increased money supply. People could still choose to support the previous money supply and it would still exist.

"Theoretically yes, if all the miners and payment providers adopted a new system which allowed for more BTC to be issued to miners in future it can but would make a hard fork.

Due to a hard fork needed in practice it is so incredibly unlikely to happen I'd say not, at least not in our lifetime. The issue is if more were to be added in would shake confidence in it being a finite resource so anyone involved in the ecosystem would lose out.

Look at how difficult it is just to increase the block size from the temporary 1Mb to 20Mb being proposed... if bitcoin is still around in 10 years it's going to be even harder to make a significant change like that.

Who knows though, it's hard enough to see 5 years into the future never mind 50."

rule that says you must put at least 10,000 transactions in each block.

This is not needed because Tx fees guarantee that it is in the interests of miners to put as many transactions as possible into a block.

Quote

Is there any reason this wouldn't work?

What you're trying to ask is why is there a limit to block size. There are two reasons. First, the Bitcoin network needs to be able to guarantee that consensus will be reached within 10 minutes. This is harder than it sounds because Bitcoin is a peer-to-peer relay network, which is very slow compared to the centralized, YouTube-style networking that we are used to, where huge caches of data are stored at a physically nearby server just waiting to be served up to anyone in the surrounding region at super-low latency and virtually unlimited bandwidth. Relay networks, by comparison, have unpredictable latency and bandwidth (network-wide throughput) is not guaranteed. In principle, the Bitcoin network could probably run a dozen times faster with 90+% reliability. But while 90+% reliability is good enough for serving up video where the worst-case scenario is that a few frames get dropped, this does not work for Bitcoin because a "dropped block" really represents a network-wide fork. So, the 10-minute rule creates tons and tons of padding to ensure that the blockchain reaches consensus on every single block. There are still occasional "orphan blocks" where the miners generate two different, valid blocks almost simultaneously. When this happens, one or the other block will generally win out after another 10 minutes when the next block gets generated. The network can support multiple instances of orphan-blocks; however, the probability of multiple orphan blocks goes asymptotically to zero with each additional block. The reason we can be sure that this asymptotic behavior holds is that the network makes sure there is lots and lots of time for the network to settle on consensus with each block added to the blockchain. If the blocks were large enough, nodes could not process them in time to make sure that this guarantee holds. If it takes a typical full node 11 minutes to process each block as it is mined (including network bandwidth+latency), the network would "fall behind" the miners and would no longer be able to reach consensus. But even if the typical full node can process a block in less than 10 minutes, orphan blocks are still at risk of creating a situation where the network can no longer reach consensus on which proof-of-work chain is the true chain.

Second, because the Bitcoin network is a peer-to-peer network, nodes are free to leave and re-join at will. The time to re-join the network is a linear function of the size of the blockchain (since the Genesis block). Right now, that is 140GB and I think it takes more than 24 hours to sync a full-node on a typical desktop PC. The blockchain will continue to grow at a rate of about 50-100GB per year with the current blocksize limitations; while the sync-time will grow in direct proportion to this, at least we know how much it will grow. If this were unrestricted, the sync time could actually fall behind an "event horizon" where it takes longer than 24 hours to process 144 blocks (24 hours worth of blocks), meaning no new node could ever join the network!

The one thing you know is that full blocks are bringing much profit for miners than not filled blocks. On the other hand, the Bitcoin developer team want to remain the block size and not bigger blocks while a part of bitcoin community wants bigger blocks. In the next fork, the altcoin B2X brings bigger blocks and the SegWit functionality remains.

Yes absolutely correct but why the dev team donot want to increase the block size to 2mb and why are they opposing.i can understand that it may not be a permannet solution but it will solve the current situaltion.And after some time we can move to 3mb size and so on.

The one thing you know is that full blocks are bringing much profit for miners than not filled blocks. On the other hand, the Bitcoin developer team want to remain the block size and not bigger blocks while a part of bitcoin community wants bigger blocks. In the next fork, the altcoin B2X brings bigger blocks and the SegWit functionality remains.

Yes absolutely correct but why the dev team donot want to increase the block size to 2mb and why are they opposing.i can understand that it may not be a permannet solution but it will solve the current situaltion.And after some time we can move to 3mb size and so on.

I see the 1MB block size (now, max block-weight under SegWit) as a Schelling point. As soon as you grant the principle that the block size can be changed, then it can be changed again and again, in which case, it is the same as having no block size limit at all. But we already know that having no block size limit is bad for a lot of reasons - it will cause centralization of the network, it will degrade service, it will attract an unlimited amount of lint and cruft into the blockchain, and can even be used to orchestrate DoS attacks on the network. So, the line has to be drawn somewhere. 1MB (that is, max block-weight) is that line.

I think the way the scalability problem is "left" unresolved does support conspiracy theory of how AXA , etc. has bought over bitcoin.

That conspiracy theory is categorically false. A lot of your "questions" are things that are leftovers from Satoshi's designs that require a hard fork to change, and we are hesitant to have hard forks willy nilly.

1) allowing poweful hardware to having mining advantage is simply against distributed consensus.

That is a natural progression of technological advancement. A Proof of Work system will always result in an arms race of who can get the best and fastest mining hardware. It doesn't matter whether it's CPUs, GPUs, or ASICs. Those who have the most money to sink into building massive mining farms are those who are going to have an advantage. Proof of Stake isn't any better (in fact it's worse and has several of its own severe issues).

There is no need to have transfer fees, incentives, etc, to motivate these mining conglomerates.

Why is there no need? We need fees and the block subsidy to incentivize miners to continue to mine and secure the blockchain. Without them, mining would not have had a start at all and there would be no incentive to mine blocks. Remove those incentives now and miners will have no incentive to continue to mine blocks, so mining will stop.

If the next day, their rigs are all destroyed - it is better for bitcoin; there are million of desktops in India, Indonesia, China who would willingly do the mining provided

They would, if there were an incentive to do that. There is no incentive to continue to mine (and expend energy and money) if there were no incentives. Furthermore, the difficulty of mining is so high that the combined computational power of people's desktops is likely not enough to mine blocks at the current pace. Not only that, but people also want to be able to use their computers to do other things too, so you can't expect everyone to dedicate all of their computing power to mining. Having the difficulty this high has benefits too; it makes performing attacks much much harder. Having a high difficulty means that the blockchain is very secure; it is extremely expensive and computationally difficult to rewrite history. That is a good thing.

While have "one node one vote" is a great idea in theory, reality tells us that this is basically impossible. Nearly all Proof of Work algorithms have been shown to be performed on GPUs, so in order for "one node one vote", every node would need to have several powerful GPUs to mine. Furthermore, as technology gets better, it is likely that such algorithms will eventually have ASICs built for them; nothing is really ASIC resistant.

As of now, you cannot stop others to think the "open source" developers have not been bought.

And you cannot stop me from telling you that such statements are wrong and very harmful to the community. Furthermore you have provided no evidence that "the developers have been bought", just nonsense that shows you don't understand how this system works.

Myth: bitcoin does not have the drawback of fiat money - the total BTC number is 21 million.The developers could change the codes tomorrow to allow 1000 million BTC in 2140!

No they could not. Such a change requires a hard fork and requires all miners and users to upgrade their software to support that. It is highly unlikely that the Bitcoin Core developers would be able to convince the entire Bitcoin community to adopt such a change.

The Bitcoin Core developers have been horrifically bad at "sweet talking" people into doing what they want. Look at how long it took to activate segwit; if the developers could "sweet talk" people into doing what they want, why wasn't segwit activated as soon as possible? For that matter, why haven't all forks activated as soon as they could (CSV did not, CLTV did not, etc.)? The Bitcoin Core developers would not be able to "sweet talk" anybody into doing anything; they're good with code, not words.

Yes absolutely correct but why the dev team donot want to increase the block size to 2mb and why are they opposing.

The maximum block size was already increased with Segwit to 4 MB. Segwit2x saying that it increases the block size to 2 MB is completely false; it increases the block size to at most 8 MB. To say that it does not is false and lying. The absolute size of blocks currently have already exceeded 1 MB since segwit activated.

The Bitcoin Core developers have already stated why they are opposing Segwit2x. It has been widely published already. I'll give you a quick run down:

The fork was done extremely hastily with little to no apparent testing or preparation

The fork does not do anything that is on the hard fork wishlist to fix any of the bugs that currently exist in Bitcoin that require a hard fork to fix. It literally does one thing, but hard forks should include as many things as possible to reduce the need to fork again later

8 MB blocks are currently too large for the network to handle. They are still vulnerable to several attacks and makes those attacks worse. 8 MB blocks will increase the requirements for running a node (more computing power, network bandwidth, storage space, etc.) and as such will likely decrease the already fairly low node count.

We have only recently activated Segwit and we don't know how that will effect Bitcoin and the economy. We should wait for Segwit to be actively used and assess later whether a further block size increase is necessary.

allowing poweful hardware to having mining advantage is simply against distributed consensus.There is no need to have transfer fees, incentives, etc, to motivate these mining conglomerates. If the nextday, their rigs are all destroyed - it is better for bitcoin; there are million of desktops in India, Indonesia, China who would willingly do the mining provided the protocol is design to have one-node-one-vote.

The natural assumption is that CPU mining would be more distributed, but it's by no means a guarantee. Before GPU mining and ASICs became a thing, Bitcoin used to have a bit of an issue with Botnets. One attacker with an exploit could infect thousands, or even millions of desktops around the world and have them all mining Bitcoin without the owners' knowledge or consent. That means unscrupulous actors could gain a larger majority in determining how the network is run. In any system, there will always be those who attempt to find ways to gain an unfair advantage.

Truth be told, Bitcoin is scalable. It will never reach a threshold, blocksize can be increased to fit more transactions, better internet, and cheaper disk storage. This though is limited by time, if you are ready to wait more 5 years allow 1 million transactions, then it would scale. If you want to do it today, it cannot.

Hence, we try to build ways around it. Lighting Network, and rest are just merely tweaks to make it scalable and are working just fine. If you can compress the blockchain without pruning the blockchain, then it would scale to infinite transactions today itself. Why compress ? because if you put more and more transactions the size of block increases, since this is a decentralized system and the block has to travel to all full nodes with varying internet connection, puts constrains on the system.

To scale blockchain today, without sacrificing its important qualities such as decentralization and immutability is a hard problem.

GeoPin : Blockchain-based interface to the physical world (http://www.geopin.network/)

It is true that my knowledge of how the bitcoin network works is rudimentary. My "attack" on bitcoin is in order to have replies to clarify doubts that I have gathered about bitcoin. I think most of those posting in "Bitcoin Discussion" don't really have a clue how the blockchain works.I have this conclusion about bitcoin as it is currently:1) Bitcoin will never and can never replace fiat. Hosts of problems: the 21 million limit means super scarcity as compared to national fiat. Singapore's M2 2017 at SGD 600,000 million; means rate of 600,000/20 = SGD 30,000 per 1 BTC. What about with USD. BTC may at most be IMF "reserve currency" as clearance currency between central banks; how does such a status be consistent with a medium of exchange.2) Bitcoin may only be a medium of speculation.Bitcoin has no practical use. Even if the proposed off-chain Lightning Network works, the natural volatility of bitcoin will never make any system of bitcoin payment feasible.

Bitcoin will ensure more wealth transfer from the bottom 99% to the top 1%

By definition, the world of speculation means the bottom 95% of small investor will always suffer lost. In the current rally to above USD7500, these 95% will never ultimately be sitting happily with their "profits" riding the wave upwards. By definition, the correction would be a bloody for the 95%. 3) Distributed consensus is incompatible with mining hardware advantage.The current situation with hash power concentrated in the hands of a few miners means this Bitcoin network will not be of any use for our economic life. Crypto will only start to have real benefits to human economic activity only when someone comes up with a true innovation where simple desktop acts as a "vote". Yes! This is the real challenge! Where ordinary users have monetary incentives to participate in the network and no one with money advantage can build "mining rigs" to monopolize the network. This is the only true open source.

People seem to be fixated to this method of "proof-of-work". In the near future, I believe there will be ideas now totally unexplored that may be far far better than our current over-hyped blockchain technology. Don't underestimate true human ingenuity .

Crypto will only start to have real benefits to human economic activity only when someone comes up with a true innovation where simple desktop acts as a "vote". Yes! This is the real challenge! Where ordinary users have monetary incentives to participate in the network and no one with money advantage can build "mining rigs" to monopolize the network. This is the only true open source.

People seem to be fixated to this method of "proof-of-work". In the near future, I believe there will be ideas now totally unexplored that may be far far better than our current over-hyped blockchain technology. Don't underestimate true human ingenuity .

I partially agree with this in that there may be a better solution in the future however, I disagree with the fact that the problem is '1 desktop = 1 vote'; The real problem is finding a way to put the power of authority into the masses (i.e. decentralisation). So far, there hasn't been a single cryptocurrency that is truly decentralised - POW = centralised mining power. POS = centralised power to largest stakeholders.

The closest thing that we have to decentralisation is The Tangle (IOTA) or Delegated proof of stake (DPOS). Although, both protocols still have their downfalls and disadvantages that stop them from either, working efficiently or solving the economic problem (scarcity*). DPOS also still puts the power into the few who are successfully elected and voted for.

*When I refer to scarcity, I refer to the economic problem NOT scarcity in itself.

I have this conclusion about bitcoin as it is currently:1) Bitcoin will never and can never replace fiat. Hosts of problems: the 21 million limit means super scarcity as compared to national fiat. Singapore's M2 2017 at SGD 600,000 million; means rate of 600,000/20 = SGD 30,000 per 1 BTC. What about with USD. BTC may at most be IMF "reserve currency" as clearance currency between central banks; how does such a status be consistent with a medium of exchange.

You could use mBTC, microBTC or even satoshi as "everyday currency", so the essential problem is not how valuable one BTC is. However, there will be a problem when satoshi is more than, let's say, 1 cent. Then you have no way to deal with small purchases.

The actual quantity of a token used as a medium of exchange does not matter; e.g. the total supply of physical gold is never too much or little for it to act as money; scarcity is only relative, never absolute. We may choose whatever small amount of gold to represent a unit of currency - just don't choose an amount such that a cup of coffee costs EUR 2,000,000! Even the satoshi could further be divided into a million parts when needed through an implementation change.

One of the quality needed for a token to be money is that the total supply is evenly distributed among the population. Even though Bill Gates's wealth is into the billions, his personal holding of the cash USD is only an miniscule part of the total US money supply. But Bitcoin is not distributed throughout the world's population and so can never serve as money.

Bitcoin may serve as a store of value just as the precious metal or other valuables. But currently, its scarcity viz-a-viz the fiat makes it only as a tool of speculation. On average in the longer term, any holder of bitcoins among the lower 95% would have got them at the "wrong" price making it a negative investment for the future.

Will bitcoin every be able to handle more than a few hundred transactions per second ?

This might become a non-issue soon. The Lightning Network will take all these micro transactions clogging up the network now and replace it with side channels. These side channels will handle the load and only the balance will be pushed to the Blockchain with one transaction.

The Block size can stay small, because the load is handled by side channels on the Lightning Network. This will prevent a massive Blockchain and reduce bandwidth requirements for running a node, making it more viable for people to run full nodes and to increase the decentralization of the network.

This does not mean that the Block size will stay the same. If the single tx's coming back from the side channels increase to a level where the Block size needs to increase, then it can still be done. ^smile^ < This will just happen less regularly, because most tx's are handled by the Lightning Network >

The one thing you know is that full blocks are bringing much profit for miners than not filled blocks. On the other hand, the Bitcoin developer team want to remain the block size and not bigger blocks while a part of bitcoin community wants bigger blocks. In the next fork, the altcoin B2X brings bigger blocks and the SegWit functionality remains.

Woldn't implementing lightning network require even bigger blocks at some point? Like 100 MB block size to cover all the needs of network for billions of people?